Kathryn Nary audited the accounts of Carringbush Ltd, an engineering firm listed on the Australian Stock Exchange. for the year ended30June20X9 Kathryn is aware that the following events that took place after30June may affect the company's financial statements (a) on25June20X9, Carringbush settled and paid a claim involving prior employees alleging sexual discrimination as a result of promotions announced at the Christmas party in2018. five women who had been overlooked for management promotions undertook legal action in March2019

Question 14 (20 marks) - Subsequent Events Review Kathryn Nary, audited the accounts of Carringbush Ltd (Carringbush), an engineering firm listed on the Australian Stock Exchange, for the year ended 30 June 20x9. Kathryn is aware that the following events that took place after 30 June (but before she had issued her report dated 19 September 20X9) may affect the company's financial statements. (a) On 25 July 20X9, Carringbush settled and paid a claim involving prior employees alleging sexual discrimination as a result of promotions announced at the Christmas party in 20X8. Five women who had been overlooked for management promotions undertook legal action in March 20X9. (b) On 1 August 20X9, Carringbush Ltd made an announcement to the Australian Stock Exchange of its intention to take over a private engineering partnership. This would increase sales revenue of Carringbush Ltd by 15%. It was to be funded by a 1:10 rights issue. (c) On 12 August 20X9, a fire damaged the head office of Carringbush. The buildings, fixtures and fittings were only partly insured. (d) At its 5 September 20X9 meeting, Carringbush's board of directors voted to double the advertising budget for the coming year and authorised a change in advertising agencies. Note that each event is independent and is to be considered separately. Q14 What is the required treatment of each event in the financial statements